As a business owner, it’s possible you make decisions every day that can come back to bite you. You may not think so, but in this day of litigiousness, your business may be at risk. A type of Business Insurance to manage your risk is management liability insurance. Depending on your business, in addition to having General Liability Insurance, having Professional Liability Insurance is not just good business, it is as necessary as heat and lighting for your office. Statutes, federal, and state laws change on a regular basis, so it is important that your company protect its assets with management or professional liability insurance. For example, if you are an Engineer, Certified Public Accountant (CPA), or in any type of field giving advice or service, you should consider professional liability insurance for your business. Some things to Consider
General Liability Insurance does not cover the risks of Employment Liability, Professional Liability, or Directors and Officers Liability. You need a separate insurance policy to cover these risks.
Defense costs are going up at a rapid rate. Management liability insurance can provide needed defense coverage, even if you are not liable (yes, even if you are not held liable). You still have to go to court.
Company owners can be held personally liable for their actions as well as the actions of other managers or executives. It is imperative to put coverage in place for protection.
Twenty five percent of private firms have had some sort of employment issue that could not be resolved without legal counsel involvement. The average defense costs are $250 per hour. These costs can add up. You also have to consider finding the right law firm, which can take time.
Many businesses fail to purchase Cyber Insurance. According to Adam Hewitt, senior vice president of INSUREtrust, “Cyber risk is the fastest-growing segment in the commercial liability insurance industry -- increasing at an annual rate of 30 percent”. The average cost of each compromised record is around $175.00. Most states have laws requiring notification if you have had an incident. If you are collecting personal data, it is your responsibility. The judge/court probably isn’t going to want to hear, it’s stored in the cloud.
If you have any questions about management liability insurance or any other type of Business Insurance, please let me know. We are located in Austin, TX and would be happy to meet with you to answer any questions and provide you with a quote. Once you have had a chance to review coverage and pricing, then you can make an informed decision.
Every once in a while I get this question from business owners. It's a good question, so I think it deserves a good answer. Let’s review an insurance scenario to put things into perspective.
Your business is a startup and you are looking for insurance quotes or maybe you have been in business for several years, but just felt like you didn't really need business insurance. Or someone is requiring you to have General Liability Insurance. Bottom line, you need insurance.
Let’s assume you are some type of manufacturer. Even if you are not technically "manufacturing" the product, but you are putting your label/brand on the product, in the eyes of an insurance company, this makes you a manufacturer. You could also be a distributor of a foreign product. If someone is injured by your product or service, who is going to be held liable? Most likely, your business, so the insurance company is going to class you the same as a manufacturer. The reason for this is they may have to respond to a product liability claim. Let’s say you don't have liability insurance. How much is it going to cost you to get a lawyer to come to your defense? Court costs? Opportunity costs (taking time off from work)? Even if you have some kind of product liability waiver, your lawyer still has to defend that waiver in court. It could be costly and time consuming. What if the court rules in favor of the plaintiff and is awarded a settlement? I think it's safe to say the costs are going to add up fast if you don't have insurance.
After considering the above,what is your annual General Liability Insurance premium? What is the coverage amount?
Perhaps you don't think there's that much risk in your product and don't think you'll ever be sued. Please consider we live in a very litigious society now. A fast food restaurant has been sued for serving hot coffee too hot not once, but twice. Also consider many years ago businesses did not get sued unless there was a loss. Now businesses are sued regardless of fault.
As a business owner, you definitely have to look at your costs, but you also have to look at protecting your business.
Strive Insurance Group represents many "A Rated" insurance carriers and is ready to help you get the protection you need. If you have questions about your business insurance policy or need a General Liability Insurance quote, please let us know.
Example: General Liability $1M Each Occurrence/ $2M Aggregate
General Liability Insurance can be confusing, especially if you're not sure the meaning of the limits, General Aggregate and Each Occurrence (Per Occurrence). Here's the difference and how it impacts your Business Insurance.
So here's the deal, Each Occurrence is the maximum the insurance company will payout per claim. Using the numbers in this example, if you have a General Liability claim that's $1,500,000, you are going to have to come up with the $500,000 since Each Occurrence is $1,000,000. Some companies see the $2,000,000 amount and they assume the $2,000,000 will cover everything. This can be confusing if you're not familiar with these numbers. Where does the $2,000,000 come into play then? Well, that is the aggregate amount. Meaning, the total amount the insurance company will payout for multiple claims during the policy term.
If you have questions about General Liability Insurance limits, Umbrella Insurance or any other Business Insurance needs, please feel free to contact me.